The monarch of this magic kingdom is no man but a mouse: Mickey Mouse. The Walt Disney Company is the world's largest media conglomerate, with assets encompassing movies, television, publishing, and theme parks. Its Disney/ABC Television Group includes the ABC television network and 10 broadcast stations, as well as a portfolio of cable networks including ABC Family, Disney Channel, and ESPN (80%-owned). Walt Disney Studios produces films through imprints Walt Disney Pictures, Disney Animation, and Pixar. It also owns Marvel Entertainment and Lucasfilm, two extremely successful film producers. In addition, Walt Disney Parks and Resorts runs its popular theme parks including Walt Disney World and Disneyland.
Disney has properties in the US and Canada, Europe, Asia, Australia, and Latin America. The company gets about 75% of its revenue from the US and Canada.
In California, Disney continues to invest in improvements to its parks, including a $1 billion effort through 2012 to renovate and upgrade its California Adventure park (adjacent to Disneyland).
Looking to expand its presence in the Asian tourism market, Disney plans to build a $3.6 billion theme park in Shanghai (43%-owned), and it is investing an additional $800 million in equity and converted loans to expand its 47%-owned Hong Kong park.
Other international Disney park locations include a 40% interest in Euro Disney, which operates Disneyland Paris; the company also collects royalties and fees from Tokyo Disneyland Resort, operated by Oriental Land Co.
The company's largest operating segment in terms of revenue is Disney's media networks, which accounted for about 45% of the company's overall sales in fiscal 2013. Media networks includes TV, cable, and radio holdings devoted to broadcast, production, and distribution, and are overseen by Disney/ABC Television Group.
Cable TV operations make up more than two-thirds of media networks segment's revenues. In addition to the leading channels such as the ESPN sports network and the Disney Channel, the company owns about 42% of A&E Television Networks (AETN), a joint venture with Hearst and NBCUniversal (NBCU). AETN includes cable channels A&E, Lifetime, and The History Channel.
The company's second biggest revenue-generator is its theme park business (about 30% of revenues in fiscal 2013), followed by its studio entertainment segment (around 15% of revenues in recent fiscal years). Disney's consumer products division -- which includes the Disney Store retail chain (with about 200 stores in North America, 100 stores in Europe, and 45 stores in Japan) and Disney Publishing Worldwide -- makes products such as straight-to-video movies, spin-off books, and licensed apparel. It accounted for about 8% of revenues in fiscal 2013.
The remaining business segment, Disney Interactive Media Group (DIMG), includes game producer Disney Interactive Studios, as well as Disney Online (producer of websites such as Disney.com and DisneyFamily.com), and the Disney-branded mobile phone business in Japan, which provides mobile phone service and content to consumers. In the digital content distribution arena, Disney owns a 30% stake in Hulu. It is a partner with fellow media giants News Corporation and NBCU in the online video venture. The company also operates a partnership with video sharing website YouTube (owned by Google) to distribute clips from shows on ABC and ESPN. In addition, Disney is active in the digital distribution of films and TV shows through Apple's iTunes store. The interactive segment accounts for about 2% of Disney's total revenues.
Sales and Marketing
Disney incurs significant marketing and advertising costs before and throughout the theatrical release of its films in an effort to generate publicity and generate consumer interest in the subsequent home entertainment market. The company’s advertising expense for fiscal 2012, 2011, and 2010 was $2.5 billion, $2.8 billion, and $2.6 billion, respectively.
Disney’s revenues increased 4% and net income increased 18% in fiscal 2012 compared to the previous year. The growth was attributed to increases in revenue from the company’s media networks segment, the parks and resorts segment, and its consumer products segment, slightly offset by a decline in revenue from the studio entertainment and interactive segments.
Like other media conglomerates, the company depends on its wide array of entertainment offerings across its film, television, and theme parks divisions to generate revenue; it also earns money by distributing its content through multiple channels. A substantial part of Disney's business also comes from ancillary products, mostly aimed at children, created from its trove of characters and other intellectual property.
Mergers and Acquisitions
In December 2012 sent shockwaves across the media world when it acquired Lucasfilm from George Lucas for more than $4 billion in order to add the Star Wars franchise to its already bursting portfolio of entertainment properties.